Can
you spell Halliburton? R-i-p- o-f-f.
War-torn
Iraq has been a gold mine for Halliburton, yet
another treasure trove of U.S. taxpayer dollars
for a company that has no peer in the fine art
of extracting riches from the government.
But
if you go through some of Halliburton's filings
with the Securities and Exchange Commission
over the past several years, as I have, you'll
see a company that goes to great lengths - literally
to the ends of the earth - to escape paying
its fair share of taxes to the government that
has been so good to it.
Annual
reports filed with the S.E.C. since the mid-90's
- when Dick Cheney took over as chief executive
and wrote the game plan for garnering government
goodies - showed Halliburton subsidiaries incorporated
in such places as the Cayman Islands, Bermuda,
Trinidad and Tobago, Panama, Liechtenstein,
and Vanuatu.
Vanuatu?
Who knew?
Vanuatu
is a mountainous group of islands in the South
Pacific. Its people support themselves mostly
by fishing and subsistence farming. "Additional
revenues," according to the Columbia Encyclopedia,
"derive from a growing tourist industry and
the development of Vila [the capital] as a corporate
tax shelter."
Halliburton,
in an S.E.C. filing in 2000, duly noted that
it had a subsidiary incorporated in Vanuatu
called Kinhill Kramer (Vanuatu) Ltd.
The
company adamantly denies that its offshore subsidiaries
are used to shift income out of the U.S. But
it's indisputable that somebody is doing a dandy
job of limiting Halliburton's tax liability.
When I asked how much Halliburton paid in federal
income taxes last year, a company spokeswoman,
Wendy Hall, said, "After foreign tax credit
utilization, we paid just over $15 million to
the I.R.S. for our 2002 tax liability."
That
is effectively no money at all to an empire
like Halliburton. Less than pocket change. Dick
Cheney must be having a good laugh over the
way his old company, following his road map,
is taking the U.S. for such a ride.
In
the early 90's, when Mr. Cheney was defense
secretary under the first President Bush, he
hired the Halliburton subsidiary Brown & Root
to determine what military functions could be
outsourced to private profit-making companies.
Brown & Root came up with myriad ideas in a
classified study and was handed a lucrative
contract to implement its own plan.
Mr.
Cheney took over as chief executive of Halliburton
in 1995, and the defense contracts just kept
on coming. When he returned to government as
vice president in 2001, no firm was better positioned
than Halliburton to cash in on the billions
of dollars in contracts that resulted from the
war on terror and the conflict in Iraq.
Halliburton
is bound so intimately to the defense establishment
it might as well be an adjunct to the military.
(Mr. Cheney still receives deferred compensation
from Halliburton but insists he has no role
in the awarding of contracts.)
Halliburton
is an organization that has the reach of a multinational
and the eyes of a Willie Sutton. Through its
subsidiaries, it has done work with countries
the U.S. has accused of supporting terror. It
was accused of overcharging the U.S. government
for work done in the 1990's, and in 2002 it
agreed to pay a $2 million settlement in response
to accusations that it had defrauded the government.
The
Pentagon is currently examining allegations
that the Halliburton subsidiary Kellogg Brown
& Root overcharged the government by $61 million
for gasoline imported into Iraq from Kuwait.
Last week the company acknowledged that at least
one employee had participated in a $6.3 million
kickback deal with a Kuwaiti company. That money
has reportedly been repaid to the government.
What
we have here is a private profit-making multinational
company with no particular allegiance (other
than contractual) to the U.S. government. Nevertheless,
through its powerful allies in the government,
Halliburton enjoys extraordinary influence over
national defense policies and has its own key
to the national treasury.
If
it's at all grateful, it hasn't shown it. The
U.S. is at war. The government is running record
deficits. Money is tight everywhere. But Halliburton
won't even kick in its fair share. It continues
to benefit from the nation's largesse, while
scouring the world for places to shelter as
much of its American riches as possible.
